The Long Con

The day Phil Ferguson killed Vern Cox, late spring was turning to summer in “The Big Empty,” an expanse of high desert in Eastern Oregon where the earth stretched lonesome and wide. By midmorning, temperatures near the remote outpost of Burns, the Harney County seat, were in the 70s, even as the Steens Mountains clung to their snowcaps off in the distance. Center-pivot irrigation systems watered fields of alfalfa. Sagebrush filled the unworked land. Here, a man could see things coming for miles: people, possibilities, trouble.

Work, too, was heating up on Vern Cox’s 320-acre ranch. It was May 30, 2012, the Wednesday after Memorial Day weekend. Cox, 62, and Kenney Bush, his young friend and ranch hand, were collecting stray lumber left over from the construction of a new corral. That coming Saturday, the men, along with a small group of neighbors and friends, aimed to brand 30 head of cattle. Afterward, they planned to celebrate with barbecue, beer, and, once the stars grew big and the night long, maybe some of Cox’s homemade coffee liqueur.

It was a simple existence, but the idea of making anything other than an honest living tickled them. Can you imagine wearing a suit and tie to work, sitting at a desk? They’d laugh. Suckers.

For Bush, 24, working with the older Cox never seemed like working at all. Cox had a talent for disguising the drudgery with stories, humor, and teasingâ€"“flicking the shit,” they called it.

Almost a decade had passed since Bush and his mother first met Cox, a tall, thin man with a bearded face often hidden by sunglasses and a ball capâ€"because of his glaucoma, he would say. Bush rarely saw his father, and Cox stepped in. He taught the boy how to handle a baseball bat, and, later, when Bush ran into trouble with the law, Cox gave him a wad of money to help out, no questions asked.

More recently, Bush and his fiancee, Shawn, had moved into a small camper on Cox’s property, replacing one of his ex-girlfriends. While Bush worked on the ranch, Shawn earned her keep by running errands and buying groceries for Cox, who also set her to the task of removing evidence of the ex-girlfriend from his single-wide trailer.

The young couple paid little mind to Cox’s recent strange behavior. In previous weeks, he had moved his stash of hay money from inside the never-used dishwasher to the air filter of an old tractor to a pistol case. And just last night, Shawn had found the door to Cox’s trailer locked and barred with a two-by-four. He said he was writing a journal entry on his laptop and didn’t want to be disturbed.

Cox was due some privacy, they thought. After all, life had taken the widower from Arkansas by surprise. He had a hard-luck story of losing a wife to leukemia, a company to bankruptcy, and his driver’s license to DUIs. Over the last decade, he had worked to leave that man behind. He had befriended Bush’s mother, played father to Bush, and turned acres of sagebrush into a profitable ranch. In the void of Oregon, Cox had found a life.

But just before noon on that Wednesday morning, as Bush and his fiancee went about their chores, Cox noticed two vehicles coming down the dirt road that ran the length of his alfalfa field. And he must have sensed that Phil Fergusonâ€"a man from his past he had hoped never to face againâ€"was about to steal it all away.

“Take the tractor,” Cox said, instructing Bush to drive around to the rear of the trailer. “I’ll be right back.”

As Bush disappeared, Cox climbed into his white flatbed Ford, where he kept a rifle on the passenger’s seat. Then he sped away, past the property’s outbuildings, to meet the visitors.

About a quarter-mile from the trailer, Cox stopped the truck and got out, leaving the rifle on the seat. He walked toward a chest-high barbed-wire fence that ran the length of the ranch and separated it from the dirt road. On the other side of the fence, a familiar man approached, carrying a gun.

For the last time, Vern Cox began to run. 

Phil Ferguson made quite a name for himself in northeastern Indiana. As a boy, Ferguson had worked on his family’s farm near Alexandria, helping his father, mother, and sister tend to corn, beans, and a few spotted Appaloosa horses. At Alexandria High School, he was active in the AV club and Future Farmers of America. “Above-average student, worked hard, well-liked, good parents,” says Orvis Burdsall, Ferguson’s high-school principal. “He was the kind of kid you never had to worry about.”

Ferguson was also a versatile athlete, lettering in track, football, andâ€"like any good Hoosier schoolboyâ€"basketball. A photo caption in his senior yearbook depicts him as the kind of lunch-pail player who took opponents by surprise: “The Hustler” Phil Ferguson speeds past an opponent who didn’t even see him go by.

After graduating in 1968, Ferguson married his high-school sweetheart, Vicki, and the couple had two children, Brian and Angie. For the next few years, he applied the same hard-working approach that made him a memorable basketball player to his job as a financial consultant with K.J. Brown Brokers in nearby Marion. In 1985, he took his portfolio and clients downtown to a red-brick storefront with a large picture window on 3rd Street. At Ferguson Financial, he developed a following among modest, good-earning folks like teachers, farmers, and factory workers.

Harry Craw, now 92, was a retired World War II veteran who had worked 40 years at the Delta Electric Company in Marion when Ferguson approached him with a financial opportunity in 1988. Craw liked that the advisor was plainspoken and that, when he paid a visit to Craw’s home, he talked about the local high-school baseball team nearly as much as he did certificates of deposit. “Seemed like a nice guy,” says Craw, “a regular guy.” Craw invested that day, and over the years entrusted $56,000 to Ferguson.

Not only did Ferguson have the common touch, but he also projected a command of the complicated financial world. He ran a satellite office in Cincinnati and another at the nexus of the commodity markets in Chicago, within walking distance of the Mercantile Exchange and the Chicago Board of Trade. To his unsophisticated clients, “The Hustler” Phil Ferguson seemed to know how to speed past the big-city investors, who didn’t even see him go by.

Individual buy-ins ranged from $2,500 to more than $1 million. For the risk-averse, Ferguson provided a humdrum collection of investments in the securities market, including bonds, mutual funds, and variable annuities. With CDs, he sold clients on a reasonable rate of returnâ€"usually just a quarter- or half-percentage point better than the local banks. Ferguson never missed a payment.

But for those with an appetite for something juicier, Ferguson offered membership in the First Investors Group, which dealt in commoditiesâ€"investments tied to the prices of raw materials and agricultural goods such as pork bellies, corn, and soybeans. In FIG, investors would pool their money and trade commodities as a single entity under Ferguson’s direction. Thanks to his Chicago connections and a down-home grasp of human nature, he was able to anticipate the swings of the high-risk commodities market to make millions for himself and his clients.

While Ferguson experienced professional success, his personal life fell into disarray. In 1993, he divorced Vicki, his high-school sweetheart; later that year, he married a woman named Elizabeth. Through it all, though, Ferguson’s business thrived, and returns skyrocketed. In 1997, Ferguson and his commodities pool of about 500 investors made a respectable $798,000; a year later, the gains jumped to $7.4 million. Then, in 1999, Ferguson sent out a letter to clients indicating he had scored a partnership with commodities firm Archer Daniels Midland, the agri-giant that billed itself as “supermarket to the world.” FIG’s clients, sold on the ADM letter, collectively made $61 million that year alone.

Based on Ferguson’s boffo performance, many clients rolled traditional investments like IRAs into the FIG kitty. Few of them ever cashed out, even when it came time to buy cars, make down payments on new homes, or pony up for college tuition. Given Ferguson’s claim of creating two to three millionaires per month, it made sense to let the Ferguson-invested money ride.

The gamble seemed to pay off. For a 13-month period starting in February 1999, Ferguson’s fund made $91 million.

"We were instant buddies,” Lillian Ramge says of Vern Cox, who had moved onto a neighboring ranch in Oregon. “He had the studs to my mares."

But Ferguson’s personal life was in tumult again. Though he never flaunted his moneyâ€"he usually wore a simple shirt and dress slacks to work and drove understated vehiclesâ€"he went on a spending spree shortly before filing for divorce from his second wife, Elizabeth, in April 1999. During the contentious divorce proceedings, she alleged that her estranged husband had been wasting and hiding marital assetsâ€"and making numerous out-of-state trips. He owned a farm close to Marion and another in nearby Summitville, and began sinking cash into expensive farm equipment, a big “dually” pickup, and high-dollar livestock. That February, he had spent $42,000 on a new Chevy truck and a Harley-Davidson motorcycle in the span of a few days.

And why not? By May 2000, FIG was on the way to yet another record showing, with a year-to-date profit of $31 million.

Neighbors shared earning statements. Co-workers bragged at break-room tables. Phil Ferguson had made them rich.

On paper.